Federal Budget 2014/15 - How it affects the insurance industry

There has been a significant amount of coverage in the media about a range of initiatives announced by the Federal Treasurer in the 2014/15 Federal Budget. In terms of its impact on the insurance industry, there are a few points that should be considered.

It has been announced that the Federal Government will provide up to $12.5 million over three years from 2014-15 to the Queensland Government to provide grants to body corporates to undertake engineering assessments of strata-title properties in North Queensland (NQ).

The Government will also provide funding over four years (including a capital component) to the Federal Treasury to develop an insurance comparison website for strata-title and home building and contents insurance offerings in NQ.

The costs associated with the aforementioned measures will be offset by savings of $72 million from the cessation of the National Insurance Affordability Initiative (NIAI). The NIAI was set up in 2013, along with the National Insurance Affordability Council.

The Budget also provides for risk mitigation initiatives including funding of $17 million for flood mitigation works in Ipswich and Roma over three years starting 2013/14.

As part of its savings, the Federal Government will be reducing funding to Australian Securities and Investments Commission. This is projected to save $120 million over five years.

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